Swedish Rate WrapItaly once again in the driver’s seat

Last week's Purchasing Manager Index confirmed the slowdown in the global manufacturing cycle and the increasing divergence between the US and the rest of the world.

Growing concern about political developments in Italy caused the market to dust off the PIGS theme, which in turn caused a considerable drop in Swedish bond yields. As a result, the curve is now the flattest it has been in a long time. We therefore change our view of the curve from flatter to neutral.